Catena Media seeks North American solace as strategic review ends

Copyright: rakchai / 123RF Stock Photo

Catena Media has once again basked in the delight of a strong North American performance, as a heightened sports showing, driven by the men’s football World Cup, offset a drop-off in the group’s casino segment.

As a strategic review concluded with a €45m sale of AskGamblers and associated brands to Gaming Innovation Group, revenue through the year’s final quarter dropped one percentage point to €31.53m (2021: €31.92m). For the full-year a slight uplift to €137.92m (2021: €136.11m) was felt.

These figures were significantly swelled by a strong showing across North America, where revenue rose 31 per cent and 24 per cent during the final quarter of 2022 and full-year to close at €21.46m (2021: €16.41m) and €84.4m (2021: €67.85m).

This was aligned to a robust performance in Maryland, which legalised licensed online sports betting in November, a strong World Cup, contributions from recently opened markets in New York, Louisiana, Ontario and Kansas, and a favourable run-up period prior to the launch of legal sports betting in Ohio on 1 January 2023.

“A prime challenge is to ensure organic growth in existing state and provincial markets,” commented Michael Daly, Catena Media CEO.

“We aim to achieve this by building on our excellence in online search positioning and by exploring new verticals such as media partnerships. 

“In Q4 we saw initial positive impacts from our first large such partnership in North America, an agreement with the US media company Advance Local under which we provide online sports betting and casino content to the news website.”

Casino revenue dropped 11 per cent and 17 per cent through Q4 and FY to €13.23m (2021: €14.93m) and €54.23m (2021: €65.24m), with a North American uptick counteracted by drops in Japan and the core European market of Italy.

The group’s sports segment increased on a global scale, buoyed by football’s aforementioned spectacle, with revenue through the quarter up 59 per cent to €14.16m (2021: €8.89m). For the year, revenue surged 49 per cent to €55.88m (2021: €37.58m).

“North America accounted for 78 percent of our revenue from continuing operations in Q4,” Daly continued. “Fully exploiting the high-margin opportunities on offer in this market will be our core operational focus going forward. 

“The shift towards regulation in online sports betting and casino continues to gain momentum globally – and nowhere more so than in North America, where five new states and provinces legalised online sports betting in 2022, while Ontario also opened for online casino. 

“We believe that regulated markets provide a more protectable and predictable environment for operators and for affiliates like Catena Media. Regulation also levels the playing field for all market players, and we welcome this positive force in our industry. 

“As a remote-first, global organisation we possess the ability to invest flexibly into newly regulated markets in different regions once they can offer stable and foreseeable operating frameworks for affiliate marketing. 

“At present, those opportunities are concentrated in North America and it is our firm belief that the United States and Canada offer the best investment case for the company and its shareholders in current conditions.”

Despite profit dropping to €1.86m (2021: €5.3m) through the quarter, this figure tracked a significant swing across the whole of 2022 to close at €26.22 (2021: -€12.83m).

Adjusted EBITDA dropped three per cent and 15 per cent to €12.71m (2021: €13.16m) and €59m (2021: €69.73m), with new depositing customers up one per cent and two per cent through Q1 and FY to 84,651 (2021: 83,539) and 354,050 (2021: 345,963).

Daly ended: “In conclusion, I would like to express my appreciation for the efforts of all our employees throughout 2022. 

“Their ability to remain focused on the business despite the sometimes significant distraction of organisational change impressed me greatly and I warmly thank each and every one for their valuable contributions.”